Reference no: EM132686426

On August 1, Flounder, Inc. exchanged productive assets with Culver, Inc. Flounder's asset is referred to below as "Asset A," and Culver' is referred to as "Asset B." The following facts pertain to these assets.

                                                                                            Asset A.                Asset B
Original cost                                                           $132,480            $151,800
Accumulated depreciation (to date of exchange)            55,200                  64,860
Fair value at date of exchange                                       82,800               103,500
Cash paid by Flounder, Inc. 20,700
Cash received by Culver, Inc. 20,700

Problem 1: Assuming that the exchange of Assets A and B has commercial substance, record the exchange for both Flounder, Inc. and Culver, Inc. in accordance with generally accepted accounting principles.